Answer:
$3,600
Explanation:
Simple interest is the amount of money earned based on the initial amount invested.
Simple Interest Formula
The formula for simple interest is A = P(1 + rt). Let's define each of these variables.
- A is the total amount of money in the account
- P is the principal or the initial amount deposited
- r is the interest rate expressed as a decimal
- t is time in years
To solve for simple interest, we need to plug in the information we are given.
Solving Simple Interest
In the question, we're told that $3000 is the initial amount deposited, so P = 3000. The rate is 2%, which means that r = 0.02. Also, this interest is earned over 10 years, thus t = 10. Now, plug this into the formula above.
Then, just simplify the right side of the equation.
- A = 3000(1 + 0.2)
- A = 3000 * 1.2
- A = 3600
This means that after 10 years, there will be a total of $3600 in the account.